Igbe`s Project Approved By Court

The possibility that investors in the International Gold Bullion Exchange will see a return on $75 million in lost investments will continue to hinge on the success of an Alaskan gold mine.

The trustee for the defunct precious metals firm was given permission in a Fort Lauderdale bankruptcy court Wednesday to continue efforts to convert the inactive mine off the Alaskan coast into a productive asset.

``I would approve of that,`` said Louis F. Kovach, an IGBE investor from Kansas City who lost $13,000 when the company closed in April 1983. ``What we`ve got now is nothing.``

IGBE trustee Earl Faircloth, assigned the task of recovering as much as possible from company assets, said he is negotiating with a group of investors who would be willing to spend as much as $5 million to make repairs at the mine. Those repairs are needed before operations can begin.

``I have confidence in the group I am dealing with and their sincerity,`` Faircloth said.

IGBE owns a controlling share in a company that has rights to mine for gold off the Alaskan coast.

After Faircloth spoke, bankruptcy court judge Sidney W. Weaver agreed to delay until June a decision on the future of IGBE. If the company does not come up with assets sufficient to reorganize and pay creditors, Weaver could order that it liquidate its assets under Chapter 7 of the U.S. Bankruptcy Code.

In that eventuality, there would not even be enough to pay taxes owed by the company, said Chad Pugatch, Faircloth`s attorney.

It won`t be known until June, when warmer weather conditions will allow ocean mining to begin, whether dredging will produce any precious metals, Faircloth said.

Gold was found in the area between 1899 and 1901, he said. The broken equipment at the site could dredge up to 5,000 ounces of gold a day, which at today`s prices of around $300 an ounce would mean $1.5 million a day, he said.

In Fort Lauderdale, Pugatch is trying to tap other resources to build IGBE`s assets.

He said he is seeking to recover $1.3 million in payments made to investors on the eve of IGBE`s decision to take its case to bankruptcy court.

Pugatch also said he plans to file a lawsuit against an insurance company that should have covered the metals purchases that went unfilled when IGBE closed its Fort Lauderdale operation.

James Alderdice, a co-founder of the company, sat quiet in the courtroom during the hearing.

``My main interest is getting this gold mine going so we can get the creditors paid,`` Alderdice said after the hearing. ``Actions speak louder than words. I am going to finish the work my brother started and pay the creditors back with interest.``

Alderdice`s brother, William, founded IGBE and boasted that it one day would be the largest precious metals dealer in the world.

After several years of operations in Fort Lauderdale, complaints that gold orders were not being filled began to surface in 1983. About 13,000 creditors now claim as much as $75 million in losses.

The firm closed its doors, and the brothers were charged with fraud by the Broward State Attorney`s Office, the U.S. Attorney`s Office and the New York Attorney General`s Office.

While awaiting trial, William, 40, was killed during a fight at his Fort Lauderdale home. James, 27, is to be tried in February on the Broward State Attorney`s Office fraud charges.